1193: How (& When) to Get Funding For Your Startup w/ Eric Vardon

WEBVTT 1 00:00:05.839 --> 00:00:10.070 Are you trying to establish your brand as a thought leader? Start a PODCAST, 2 00:00:10.589 --> 00:00:15.669 invite industry experts to be guests on your show and watch your brand become 3 00:00:15.710 --> 00:00:21.620 the prime resource for decision makers in your industry. Learn more at sweetphish MEDIACOM. 4 00:00:26.500 --> 00:00:30.699 You're listening to be tob growth, a daily podcast for B TOB leaders. 5 00:00:31.300 --> 00:00:34.460 We've interviewed names you've probably heard before, like Gary Vanner, truck and 6 00:00:34.500 --> 00:00:38.250 Simon Senek, but you've probably never heard from the majority of our guests. 7 00:00:38.929 --> 00:00:43.689 That's because the bulk of our interviews aren't with professional speakers and authors. Most 8 00:00:43.729 --> 00:00:47.850 of our guests are in the trenches leading sales and marketing teams. They're implementing 9 00:00:47.890 --> 00:00:52.840 strategy, they're experimenting with tactics, they're building the fastest growing BTB companies in 10 00:00:52.880 --> 00:00:56.200 the world. My name is James Carberry. I'm the founder of sweet fish 11 00:00:56.240 --> 00:00:59.759 media, a podcast agency for BB brands, and I'm also one of the 12 00:00:59.880 --> 00:01:03.679 CO hosts of this show. When we're not interviewing sales and marketing leaders, 13 00:01:03.880 --> 00:01:07.469 you'll hear stories from behind the scenes of our own business. Will share the 14 00:01:07.549 --> 00:01:10.829 ups and downs of our journey as we attempt to take over the world. 15 00:01:11.430 --> 00:01:21.700 Just getting well, maybe let's get into the show. Welcome back to be 16 00:01:21.859 --> 00:01:25.459 tob growth. I'm logan miles with sweet fish media. I'm joined today by 17 00:01:25.540 --> 00:01:29.620 Eric Far Dawn. He is the CEO and Co founder over at Morpheo. 18 00:01:29.739 --> 00:01:32.930 Eric has it going today, sir, fantastic that it's Friday. Logan, 19 00:01:33.010 --> 00:01:36.489 thanks for having me. Appreciate it absolutely. I am excited to chat with 20 00:01:36.569 --> 00:01:38.530 you today. We're going to be chatting a little bit about the myth of 21 00:01:38.689 --> 00:01:44.650 success and growth, some of the things that folks might not quite understand yet, 22 00:01:44.689 --> 00:01:48.200 depending on where they're at their entrepreneurship journey. I know we have a 23 00:01:48.200 --> 00:01:49.920 lot of sales and marketing leaders that listen to this show, a lot of 24 00:01:51.319 --> 00:01:56.200 executives, founders CEOS as well, and so I think on your own entrepreneurship 25 00:01:56.239 --> 00:01:59.400 journey, your own business growth journey, they're going to be some lessons to 26 00:01:59.560 --> 00:02:04.069 unpack around success growth. We're going to be talked about raising money and various 27 00:02:04.109 --> 00:02:07.790 things that are just synonymous with startup life. But before we get into that, 28 00:02:07.909 --> 00:02:09.150 Eric, I would love for you to share with listeners a little bit 29 00:02:09.229 --> 00:02:13.909 about your background, the journey you've been on and what you and the team 30 00:02:13.909 --> 00:02:15.979 at Morpho are up to these days. Absolutely Logan. I don't know how 31 00:02:16.020 --> 00:02:19.780 much time we have, so we'll go with the short version. But long 32 00:02:19.900 --> 00:02:24.020 term, nerd been in technology and marketing a long time, serial entrepreneur. 33 00:02:25.099 --> 00:02:29.699 Love being in business, to talk with entrepreneurs and yes, so CEO, 34 00:02:29.860 --> 00:02:36.330 cofounder of Morpheo, which is game changing ai machine learning business in the marketing 35 00:02:36.370 --> 00:02:39.930 stack. So look for the Chattan awesome man. Well, the first thing 36 00:02:40.009 --> 00:02:44.169 I think we need to talk about if we're going to dispel any myths around 37 00:02:44.250 --> 00:02:47.919 success and Growth and we've got to define some things, and that was your 38 00:02:49.039 --> 00:02:53.319 recommendation to a lot of entrepreneurs as we were chatting offline, is taking some 39 00:02:53.520 --> 00:02:57.280 time to define success and begin with the end in mind. Tell us a 40 00:02:57.280 --> 00:03:00.150 little bit about, you know, some lessons learned there and what you are 41 00:03:00.270 --> 00:03:05.909 sharing with with your peers now based on those lessons. Yeah, absolutely. 42 00:03:05.949 --> 00:03:08.949 I mean we all entrepreneurs take our own journey and when we're getting started, 43 00:03:08.990 --> 00:03:13.620 and everybody that's listening will read books or podcasts or, you know, watch 44 00:03:13.699 --> 00:03:16.300 movies or whatever we do to find pleasure and get our inspiration to be an 45 00:03:16.340 --> 00:03:21.099 entrepreneur, and it's fantastic at that. That guidance has to come into a 46 00:03:21.180 --> 00:03:24.620 decision that every entrepreneur makes around what makes us happy, what makes you happy? 47 00:03:25.340 --> 00:03:30.849 So generally that comes from within. Defining values and morals around how you're 48 00:03:30.889 --> 00:03:34.449 brought up, in the way you manage people would ultimately be the way you 49 00:03:34.530 --> 00:03:38.169 manage your life in business and outside. So I'd always say, no matter 50 00:03:38.250 --> 00:03:42.879 what type of environment that you're in, whatever books you read, look within 51 00:03:42.960 --> 00:03:46.280 yourself and say, here's what I'm hoping to achieve with this business, outside 52 00:03:46.280 --> 00:03:49.960 of the monetary or other success factors. What's going to make you happy every 53 00:03:49.960 --> 00:03:53.039 day as well as when you go home? I mean, ultimately it's a 54 00:03:53.280 --> 00:03:55.909 being entrepreneurs not something you turn off at five o'clock. It really sticks with 55 00:03:57.110 --> 00:04:01.110 you at all times of the day and all hours and through difficult and exciting 56 00:04:01.150 --> 00:04:04.710 things. So if you're driving towards something that really and truly makes you happy 57 00:04:04.750 --> 00:04:08.710 from within, Righte that on your wall, stick to it and buy it 58 00:04:08.789 --> 00:04:11.099 every day, and it's something that has worked work very well for me. 59 00:04:11.699 --> 00:04:14.659 Yeah, that's fantastic advice. Man, as you look at, you know 60 00:04:14.860 --> 00:04:18.819 the landscape today INTAC and just you know startups in general. Are there are 61 00:04:19.100 --> 00:04:23.459 ways that you kind of break it up into okay, there's there's kind of 62 00:04:23.500 --> 00:04:26.089 this path, there's this path, there's this path. You know, as 63 00:04:26.129 --> 00:04:29.490 you mentioned on the personal side, it can be very nuance, very dynamic. 64 00:04:29.569 --> 00:04:31.889 There's there's way more than three paths right, but as you look at 65 00:04:31.930 --> 00:04:35.290 it, there are kind of some some common tracks. Is there, you 66 00:04:35.370 --> 00:04:39.920 know, kind of a starting framework to give folks who are earlier in their 67 00:04:40.000 --> 00:04:45.279 entrepreneurship journey some advice to think about? Okay, this one versus this one, 68 00:04:45.480 --> 00:04:47.399 versus this one, at least, you know, painting in somewhat broad 69 00:04:47.439 --> 00:04:50.639 strokes. Sure, yeah, I mean I know that right now it's topical 70 00:04:50.759 --> 00:04:55.470 to talk about how failure is is okay, and then I absolutely support that. 71 00:04:56.310 --> 00:04:59.230 But I think to kind of close that deeper, for me it's about 72 00:04:59.350 --> 00:05:01.550 making sure you make quick decisions and so, as much as it could be 73 00:05:01.550 --> 00:05:04.990 a failure, it's being comfortable with the fact that you may need to change 74 00:05:05.029 --> 00:05:09.540 or move on a decision that you made that day or even that hour, 75 00:05:09.939 --> 00:05:14.860 and that ability to be as agile as possible alongside your business, alongside your 76 00:05:14.899 --> 00:05:18.139 customers. One is definitely one way I would answer it. I think outside 77 00:05:18.139 --> 00:05:21.410 of that it's just sticking true back to the goals that you have laid out 78 00:05:21.449 --> 00:05:26.850 and as long as you're listening to yourself, your customers, your audiences and 79 00:05:26.850 --> 00:05:30.129 the things that you focused on within your business. You know, it's easy 80 00:05:30.170 --> 00:05:32.769 to start, but it's also more difficult to pivot as you need to and 81 00:05:33.089 --> 00:05:35.399 being okay to say, listen, I need to make a change based on 82 00:05:35.480 --> 00:05:40.519 something I did yesterday. and to me that's the biggest advantage today now, 83 00:05:40.560 --> 00:05:44.560 especially in technology or start up in general, there's so many resources, there's 84 00:05:44.560 --> 00:05:47.480 so many forms of content, education inspiration out there. You know, it 85 00:05:47.680 --> 00:05:51.629 gives us an ability to try and test something, track it and really understand 86 00:05:51.629 --> 00:05:55.509 if there's an url either and if it is, do morph. If there 87 00:05:55.629 --> 00:05:58.870 isn't, do less. Yeah, absolutely. And you know, on that 88 00:05:59.029 --> 00:06:01.589 topic of okay, do I want to go and be Super Adile? You 89 00:06:01.629 --> 00:06:04.699 know, I think of our own team here at sweet fish. James Carberry, 90 00:06:04.819 --> 00:06:09.699 our founder, is man. He is an idea guy. Sometimes it's 91 00:06:09.779 --> 00:06:12.740 tough for some of us on the team to keep up with with the new 92 00:06:12.779 --> 00:06:15.459 ideas and trying things out, and I think we've definitely leaned into that. 93 00:06:15.939 --> 00:06:20.449 You know, as we talk about startup life and entrepreneurship, it's tough to 94 00:06:20.610 --> 00:06:26.490 have any conversation without thinking about raising money. You know, VC money in 95 00:06:26.529 --> 00:06:30.930 certain sectors is maybe easier to come by than it has been in years past. 96 00:06:30.050 --> 00:06:32.959 Again, I know I'm painting with broad strokes, but I think as 97 00:06:33.000 --> 00:06:36.399 we talk about different paths forward, you know, you look at okay, 98 00:06:36.439 --> 00:06:41.399 do we do we raise money? Do We bootstrap right and when do we, 99 00:06:41.759 --> 00:06:44.839 you know, make that large pivot? And how does that affect the 100 00:06:44.920 --> 00:06:47.149 pivots that we might want to make? You know along the way and from 101 00:06:47.189 --> 00:06:53.269 your background, Eric, having experience, you know, bootstrapping companies in service 102 00:06:53.269 --> 00:06:56.990 space businesses, versus, you know, raising capital, can you give some 103 00:06:57.110 --> 00:07:01.740 advice to folks in how to think about how they approach funding their business and 104 00:07:02.220 --> 00:07:08.379 maybe draw some distinctions between those two major paths a bit? Yeah, absolutely, 105 00:07:08.459 --> 00:07:11.139 and just topical. Lose a great to, a great book by the 106 00:07:11.220 --> 00:07:15.930 founder of Mos call a lost and Co founder and I think recommended to to 107 00:07:15.050 --> 00:07:20.209 anybody listening. But in any time, you can manage your business for as 108 00:07:20.250 --> 00:07:25.170 long as possible and Bruce Strap it is going to, you know, ultimately 109 00:07:25.250 --> 00:07:29.009 give you the most power. That being said, it really depends on the 110 00:07:29.089 --> 00:07:31.920 type of support that you have and the partnership that you have with both your 111 00:07:31.959 --> 00:07:35.040 people and your team, and so you may get quite lucky and you don't 112 00:07:35.079 --> 00:07:40.000 really need any outside resources. Or, like me, you've stumbled along the 113 00:07:40.040 --> 00:07:43.040 way and many businesses and got lucky and met some great people and have a 114 00:07:43.120 --> 00:07:46.949 team that you know mitigates that risk. But most of US starting and same 115 00:07:46.029 --> 00:07:48.750 as me, young, you want to move fast and, you know, 116 00:07:48.870 --> 00:07:53.589 make mistakes and all those great things, and hopefully you can. You know, 117 00:07:53.870 --> 00:07:56.589 work, work closely with people. You don't need a lot of outside 118 00:07:56.589 --> 00:07:59.620 funding. That will allow you to keep control and ultimately, you know, 119 00:07:59.699 --> 00:08:01.300 most people will say that's the the goal to success, but it really does 120 00:08:01.339 --> 00:08:05.540 depend on the type of business as well, and so really look at the 121 00:08:05.699 --> 00:08:09.939 model of your business the amount of cash that is required. If you are 122 00:08:09.980 --> 00:08:13.490 in a startup and you need a bunch of money to build an MVP and 123 00:08:13.569 --> 00:08:16.889 you're going to not even realize any revenue for a few years while you're going 124 00:08:16.889 --> 00:08:18.050 to have to fund that somehow. You know, if you're more in a 125 00:08:18.089 --> 00:08:22.370 service based business, you're relying on hours and people and the time that is 126 00:08:22.730 --> 00:08:26.199 is realized from that, well, you can probably start real small, go 127 00:08:26.319 --> 00:08:30.480 out there and hit the pavement and bring some sales and really use that cash 128 00:08:30.519 --> 00:08:33.919 flow to build the business as well. But, as you growing sophistication, 129 00:08:33.000 --> 00:08:37.919 there's always opportunities, whether it's acquisition or whether it's new technology, whether it's 130 00:08:37.960 --> 00:08:39.759 investments. And mean there will be a need at some point for you, 131 00:08:39.840 --> 00:08:43.429 you know, to look at the business and say I need cash. Raising 132 00:08:43.509 --> 00:08:48.029 money is one going to a bank line of credits, you know. You 133 00:08:48.149 --> 00:08:52.190 know, pitching against your receivables for, you know, for cash that's required. 134 00:08:52.549 --> 00:08:54.070 Is Options. I mean there's so many out there. But again, 135 00:08:54.110 --> 00:08:58.740 you need to to really be strong around the team around you great advisors and 136 00:08:58.820 --> 00:09:01.980 also, you know, realize that there are no magic answers and just be 137 00:09:03.100 --> 00:09:05.259 really close to how you use that money. And you know it does come 138 00:09:05.340 --> 00:09:07.740 to an end and it does come with terms and it does come with that. 139 00:09:07.860 --> 00:09:11.330 Ultimately, to your point earlier, Logan, which I think is perfect, 140 00:09:11.529 --> 00:09:13.129 is, you know, it seems glorious, but when the money comes 141 00:09:13.169 --> 00:09:16.289 in, ultimately that's when you really become accountable to someone else. If you 142 00:09:16.330 --> 00:09:20.649 haven't done that before, it could be could be quite risky. Yeah, 143 00:09:20.649 --> 00:09:24.129 I like what you're saying. They're about, you know, how you think 144 00:09:24.169 --> 00:09:26.559 about the type of business, you know, is it more service based, 145 00:09:26.960 --> 00:09:31.200 is IT product centric? Is it a mixture of both? Some of those 146 00:09:31.320 --> 00:09:35.799 factors to determine, you know, what type of funding or any outside funding, 147 00:09:35.879 --> 00:09:39.669 do you need it or not, and what timeline will will you possibly 148 00:09:39.750 --> 00:09:43.470 need it on as you look at different opportunities or different avenues to secure those 149 00:09:43.669 --> 00:09:50.029 outside funding resources? Are there some other factors that you recommend other entrepreneurs think 150 00:09:50.070 --> 00:09:54.419 about other than the business model itself? Is it, you know, looking 151 00:09:54.419 --> 00:09:58.700 ahead, how quickly can we grow? Because you know, based on what 152 00:09:58.940 --> 00:10:01.779 expectations are going to come along with with that funding, depending on the source? 153 00:10:03.100 --> 00:10:05.460 Can you speak to that a little bit more? You? Yeah, 154 00:10:05.460 --> 00:10:07.570 sure, I mean it's a could get long winded, but just to paint 155 00:10:07.610 --> 00:10:11.450 the picture, I mean generally, if you're in let's stick stick with tech 156 00:10:11.570 --> 00:10:15.250 and and sort of the startup world as the theme, you know you're going 157 00:10:15.289 --> 00:10:18.970 to generally need to build a product of some kind and you need to bootstrap 158 00:10:18.049 --> 00:10:20.639 that and so generally you do, you know, do that with your own 159 00:10:20.679 --> 00:10:24.879 pocket money, your own investment savings, etc. Or you go to friends 160 00:10:24.919 --> 00:10:28.440 and family and and that's the best way for you to build something that you 161 00:10:28.519 --> 00:10:31.080 can go out and at least test with an audience, and I think that 162 00:10:31.200 --> 00:10:35.950 is first and foremost is get something out there and get some kind of proof 163 00:10:35.070 --> 00:10:39.629 before you have revenue. Angel investors are always going to want to know that 164 00:10:39.750 --> 00:10:43.269 people care about the product, that you validated in some respect. And you 165 00:10:43.350 --> 00:10:46.830 know, every fund or every investor has a different thesis, which I can 166 00:10:46.870 --> 00:10:50.860 speak to, or a different way or the types of businesses that they like 167 00:10:50.980 --> 00:10:54.100 to invest in, but regardless, they're all going to want some kind of 168 00:10:54.220 --> 00:10:56.700 proof outside of I know this is a good idea. I've been thinking about 169 00:10:56.700 --> 00:11:00.340 every day in my base from for the last three years. Three, five, 170 00:11:00.659 --> 00:11:03.860 ten, fifteen, whatever the number is, real people that can say 171 00:11:03.899 --> 00:11:07.169 I love this product, it's a fit. Here's why. Is One big 172 00:11:07.210 --> 00:11:11.210 advantage. The second is that you're going to always think about the differences in 173 00:11:11.289 --> 00:11:15.690 your product in terms of the way people are buying them versus the way you 174 00:11:15.889 --> 00:11:20.000 thought that they were going to buy them, and those are instrumental to answering 175 00:11:20.039 --> 00:11:22.720 those questions back to an investor. So from there you're going to bring on 176 00:11:22.840 --> 00:11:26.720 some generally some some angel investment, probably in the two hundred two, you 177 00:11:26.759 --> 00:11:31.080 know, five hundred seven, hundred fifty thousand maybe a million dollar range and 178 00:11:31.200 --> 00:11:33.149 from there you get up into the seed funding and as you get through the 179 00:11:33.190 --> 00:11:37.710 angel funding, you generally get into some kind of monthly reoccurring revenue. That 180 00:11:37.870 --> 00:11:41.870 really proves that you've got some traction and many businesses can stay within that and 181 00:11:41.990 --> 00:11:45.789 they can cash flow and, you know, and pay off their debts or 182 00:11:45.950 --> 00:11:48.580 convert their, you know, their angel investors into partners. You know, 183 00:11:48.980 --> 00:11:52.500 from there you have some really big decisions because you've probably given away a couple 184 00:11:52.620 --> 00:11:56.539 points of the company or twenty, thirty percent. Again, it depends. 185 00:11:56.620 --> 00:12:00.740 So you don't don't count on my numbers. But then it really becomes how 186 00:12:00.779 --> 00:12:03.490 much do you want to keep versus the upside? So your point Logan. 187 00:12:03.570 --> 00:12:07.690 It's then it's around cash flow projections and how really you want to scale. 188 00:12:07.009 --> 00:12:11.370 The biggest decision at that point is do you need help to get to that 189 00:12:11.490 --> 00:12:15.289 next phase within your business? If you are planning to have, and almost 190 00:12:15.330 --> 00:12:18.600 can prove you have a hundred million or two hundred million dollar business and you 191 00:12:18.679 --> 00:12:22.159 haven't run at twenty or fifty million dollar business, you want to bring in 192 00:12:22.240 --> 00:12:24.840 somebody that is smart not only around your vertical and your business, but cannot 193 00:12:26.120 --> 00:12:30.269 only again add value in contacts, etc. But also bring money to make 194 00:12:30.350 --> 00:12:33.110 those things happen. So to me that's the biggest key is good money, 195 00:12:33.230 --> 00:12:37.029 good partnership, someone that can add values going to go a long way outside 196 00:12:37.029 --> 00:12:39.870 of just cash. That's going to help you. But still you have a 197 00:12:39.909 --> 00:12:43.379 lot to learn to grow. Something you said there makes me want to take 198 00:12:43.379 --> 00:12:46.980 a little bit of a deturb what you said earlier about, you know, 199 00:12:48.100 --> 00:12:52.379 managing managing expectations with investors. I want to come back to that because I 200 00:12:52.419 --> 00:12:54.580 think that's a next stage here. But as you're talking about, you know 201 00:12:54.740 --> 00:12:58.889 what you need to build to accomplish the next phase. Again, I know 202 00:13:00.090 --> 00:13:03.090 this is going to be colored a little bit by your experience and it's going 203 00:13:03.289 --> 00:13:07.529 to vary, so there's no one silver bullet answer. But in your experience, 204 00:13:07.769 --> 00:13:13.720 is there an area where a lot of CEOS or founders say, okay, 205 00:13:13.000 --> 00:13:16.120 we need to invest in sales or no, marketing's got to come first, 206 00:13:16.120 --> 00:13:18.720 because if I hire sales people and they don't have enough fleets to work, 207 00:13:18.919 --> 00:13:22.559 and I've heard that. One of the things we've looked at is, 208 00:13:22.919 --> 00:13:26.190 you know, we really needed to beef up operationally more than sales or marketing 209 00:13:26.230 --> 00:13:31.269 or anything over the last several months and we've been lucky enough to get the 210 00:13:31.309 --> 00:13:35.070 right people on the bus to help us in in that regard. Any thoughts, 211 00:13:35.149 --> 00:13:39.509 they're on kind of misconceptions or typical perceptions on you know, which function 212 00:13:39.629 --> 00:13:43.259 of the business to invest in, again, knowing there's going to be some 213 00:13:43.379 --> 00:13:46.820 dynamics to this answer. Well, the answers everything. So I mean it's 214 00:13:48.220 --> 00:13:52.139 it's the right amount of everything will always be your most successful path. So 215 00:13:52.460 --> 00:13:56.850 that comes into a small team of generalists that care about the business, that 216 00:13:56.929 --> 00:14:01.610 are probably going to come in with one area of expertise and learn a whole 217 00:14:01.649 --> 00:14:05.730 bunch of others. So, you know, to me it's you know directly, 218 00:14:05.809 --> 00:14:09.279 it's you've got to build something that can function enough across all all parts 219 00:14:09.320 --> 00:14:13.159 of the business to show proof. So you need some kind of tool or 220 00:14:13.279 --> 00:14:16.879 product or process that you're going to build. Again, you're right. It's 221 00:14:16.919 --> 00:14:20.320 variable based on the type of business which you're going to need to understand the 222 00:14:20.399 --> 00:14:24.669 market. Generally, the founders and the CEOS or the original shareholders a going 223 00:14:24.669 --> 00:14:26.549 to be the ones, at least one of them, going out and selling 224 00:14:26.590 --> 00:14:31.710 and grinding and on the pavement talking to people bringing that information back to whatever 225 00:14:31.789 --> 00:14:37.990 the product or process is, that that balance between sale and product and marketing 226 00:14:37.779 --> 00:14:41.940 is it can be done in a very small room with the right amount of 227 00:14:41.019 --> 00:14:46.059 people. To me, that proof point really brings it together. And you'll 228 00:14:46.100 --> 00:14:48.659 probably know within the business, and this is really where the guidance of money 229 00:14:48.659 --> 00:14:52.970 and investors can come in, is they're probably going to see the holes before 230 00:14:54.009 --> 00:14:56.649 you do, as well as the opportunities holes, the operation opportunities in the 231 00:14:56.690 --> 00:15:01.049 market. That's why the ultimately invest, because you may be the best salesperson, 232 00:15:01.210 --> 00:15:05.409 you may have the best product, you may have have the best operational 233 00:15:05.490 --> 00:15:09.200 process. It's okay if you don't have all of them perfect, but if 234 00:15:09.240 --> 00:15:11.879 you lead with one, you're going to feel it and they're going to know 235 00:15:13.000 --> 00:15:16.279 it and ultimately that's what makes a fantastic partnership. HMM. That makes a 236 00:15:16.360 --> 00:15:20.519 lot of sense and it kind of segues back to where I wanted to go, 237 00:15:20.679 --> 00:15:24.429 that you touched on earlier, is the expectations of investors, what they're 238 00:15:24.470 --> 00:15:28.470 typically going to look for in those proof points and some things that folks might 239 00:15:28.509 --> 00:15:31.070 not be, you know, prepared for if they've never gone through this journey 240 00:15:31.309 --> 00:15:37.139 of seeking outside funding in their start up up to now. Can you speak 241 00:15:37.139 --> 00:15:39.580 to that a little bit? And then, I think just as importantly is 242 00:15:39.940 --> 00:15:46.340 managing your own expectations and managing expectations with your investors through that next stage. 243 00:15:46.700 --> 00:15:52.009 Can Be very critical to go from okay, boom and celebrated right seed round 244 00:15:52.049 --> 00:15:56.649 of funding to falling flat on your face. So you can speak to both 245 00:15:56.649 --> 00:15:58.450 of those and I think we round out the conversation with some thoughts you've got 246 00:15:58.529 --> 00:16:03.210 on culture as well. Yeah, absolutely so. Every step that I had 247 00:16:03.639 --> 00:16:07.639 managed to get into a little bit before has its own set of expectations, 248 00:16:07.759 --> 00:16:12.559 right. So family and friends, bootstrapping with your own money has a different 249 00:16:12.559 --> 00:16:17.960 set of expectations. They're buying into you as well as the angels. Ultimately, 250 00:16:18.039 --> 00:16:19.830 they're both in it for some kind of return, but they're generally not 251 00:16:21.029 --> 00:16:25.629 savvy investors. The angels will be because they probably done it before, but 252 00:16:25.710 --> 00:16:29.429 it's on a smaller scale, so they're a little bit more risk adverse, 253 00:16:29.470 --> 00:16:32.899 if you will, and they're interested in you, the story and they're they 254 00:16:32.980 --> 00:16:37.220 want to get in at the start. So expectations hopefully can be managed, 255 00:16:37.299 --> 00:16:41.419 but they're they're generally looking for a win and it's not nearly as prescriptive as 256 00:16:41.460 --> 00:16:47.370 when you get into the seed a bees and sea rounds, because those are 257 00:16:47.529 --> 00:16:52.529 formulaic in exactly the type of input and output that they expect, whether it's 258 00:16:52.529 --> 00:16:55.129 a fund or private equity, your family office. Again, you can do 259 00:16:55.169 --> 00:16:59.649 your research on those. Terms of the plethora of options out there. They 260 00:16:59.690 --> 00:17:02.960 all have their own thesis and by thesis they have their certain fun with a 261 00:17:03.039 --> 00:17:07.559 certain thesis. The thesis specifically states the type of businesses that they, you 262 00:17:07.640 --> 00:17:11.519 know, employ or deploy their cash into, the type of vertical, the 263 00:17:11.559 --> 00:17:14.960 type of entrepreneurs like. They're really prescripted. They know exactly what they want. 264 00:17:15.039 --> 00:17:18.349 So they almost set the expectations going in of what they hope to achieve 265 00:17:18.670 --> 00:17:22.509 and I would always say do your due diligence understand generally with the type of 266 00:17:22.630 --> 00:17:26.549 return is that they're looking for, the type of equity, the type of 267 00:17:26.869 --> 00:17:30.099 whether it's convertible notes, etc. Or lending options. I mean there's a 268 00:17:30.700 --> 00:17:34.259 whole bunch of different ways. So to me it does really depend on where 269 00:17:34.259 --> 00:17:37.819 you are. So a few points on the expectations really, but I would 270 00:17:37.819 --> 00:17:42.059 say just communicate, over communicate and really ask tough questions. Make sure that 271 00:17:42.099 --> 00:17:47.369 there're people that you know you fit with, but also have a personalit because 272 00:17:47.369 --> 00:17:48.130 you're going to spend a lot of time with them, you're going to report 273 00:17:48.130 --> 00:17:51.569 to them, you're gonna have phone calls all day, every day. So 274 00:17:51.809 --> 00:17:53.529 make sure that you're on the same page and you have a good gut feeling 275 00:17:55.250 --> 00:17:57.880 from the cofounder perspective. You know, it really does go both ways and 276 00:17:59.119 --> 00:18:02.519 know what you hope to get out of it each of or at each of 277 00:18:02.599 --> 00:18:06.400 those stages. You're not going to get a lot outside of Monday money from 278 00:18:06.400 --> 00:18:11.079 the early phases of family and friends and Angel as you get up to the 279 00:18:11.160 --> 00:18:14.670 other seed rounds, that's really where you need to set expectations on what you 280 00:18:14.789 --> 00:18:18.509 hope to achieve. We just went through and raised our seat fund million bucks 281 00:18:18.589 --> 00:18:21.990 with a five million dollar valuation on this new business. Great, you know, 282 00:18:22.069 --> 00:18:25.109 we're excited about it. So we had certain things that we wanted with 283 00:18:25.230 --> 00:18:29.579 this investment at this round, knowing the experience that we have being through this 284 00:18:29.779 --> 00:18:33.740 before. So taken to the consideration what you've been through before, what you 285 00:18:33.859 --> 00:18:37.420 haven't you know. So I'm looking for now is the CEO in a new 286 00:18:37.460 --> 00:18:40.539 world of SASS, in the new world of tech and AI, doing things 287 00:18:40.539 --> 00:18:42.289 I haven't had to do in a long time in the business of sales has 288 00:18:42.289 --> 00:18:45.529 changed. So you know, to me it's now where we going to go 289 00:18:45.609 --> 00:18:48.930 to next, what are the pitfalls that I'm probably going to run into and 290 00:18:49.130 --> 00:18:52.890 how can I find a partner that's going to help with those? Right now 291 00:18:52.970 --> 00:18:56.400 we're looking at having enough funds to enable some of the things that we want 292 00:18:56.400 --> 00:19:00.480 to do, and that's a balance between us and the investors now as well 293 00:19:00.519 --> 00:19:03.039 as where we go so definitely on both sides. Hopefully that provides a little 294 00:19:03.039 --> 00:19:07.440 bit more a little bit more context. Hey, everybody, Logan here. 295 00:19:07.720 --> 00:19:14.269 Quick shout out to today's grows sponsor. Talk about helps ECOMMERCE companies grow through 296 00:19:14.390 --> 00:19:19.549 targeted referral programs that leverage insights from door customers behavior. Join others who've hit 297 00:19:19.630 --> 00:19:25.539 their sales goals and seen a n x Roy on their referral programs. Talk 298 00:19:25.619 --> 00:19:30.500 about lets you segment your offers and personalize your messaging two different audiences, like 299 00:19:30.700 --> 00:19:36.420 new versus repeat customers, or by geolocation. Talk about also easily integrates with 300 00:19:36.500 --> 00:19:40.490 the rest of your text act, having a low impact on site speed and 301 00:19:40.650 --> 00:19:45.769 navigation, creating a seamless user experience while helping you drive more sales. Learn 302 00:19:45.809 --> 00:19:51.730 more at growth doc TALKABLECOM. All right, let's get back to the show. 303 00:19:53.200 --> 00:19:59.119 You mentioned asking tough questions of potential cofounders, of investors, probably, 304 00:19:59.160 --> 00:20:03.400 you know, of early stage employees as well. Can you give us an 305 00:20:03.440 --> 00:20:06.920 example of maybe one of those tough questions? You you are glad you asked. 306 00:20:06.960 --> 00:20:08.630 Yeah, I mean, I like foosh. I wish I could remember 307 00:20:08.630 --> 00:20:14.390 all them now, but you know specifically it's around. You know many times 308 00:20:14.509 --> 00:20:18.750 you won't have as much financial experience. You probably didn't work in a bank, 309 00:20:18.950 --> 00:20:23.420 you probably aren't an analyst. You know you're a cofounder, you're working 310 00:20:23.500 --> 00:20:26.500 hard, you know your business better than anybody, but you don't always know 311 00:20:26.579 --> 00:20:32.140 the logistics behind the scene. So you know whether their acronyms, you know 312 00:20:32.660 --> 00:20:34.420 whether they're like safe agreements. What does that mean? I mean I can 313 00:20:34.500 --> 00:20:37.130 think of a few that I'm like, okay, I don't know what that 314 00:20:37.289 --> 00:20:40.769 is. I write write it down, I'll go home and I'll google it 315 00:20:40.890 --> 00:20:42.450 after and pretend I know it's going on or try to, you know, 316 00:20:42.490 --> 00:20:47.049 multitask in the meeting and figure it out. That's a little bit naive. 317 00:20:47.089 --> 00:20:49.200 I mean, I think it's you know, stop and tell me and educate 318 00:20:49.279 --> 00:20:52.599 me on what that is. I'd love to learn more. You know, 319 00:20:52.680 --> 00:20:56.799 I think if you're proactive and transparent around what you don't know and the confidence 320 00:20:56.839 --> 00:20:59.440 that you have to stop in it in a room and say, you know, 321 00:20:59.759 --> 00:21:00.720 this is why I'm here, I think I could learn a lot from 322 00:21:00.759 --> 00:21:04.029 you. Again, depends on where you're at with your confidence. I wouldn't 323 00:21:04.029 --> 00:21:07.950 have done that fifteen years ago, you know, and now I don't care 324 00:21:07.990 --> 00:21:10.589 if I don't know what it is and I'm so curious. Tell me in 325 00:21:10.710 --> 00:21:12.829 the moment and let's have a conversation, and I think that is actually an 326 00:21:12.869 --> 00:21:17.950 advantage. So there's one example for I love that. I think that's phenomenal 327 00:21:18.029 --> 00:21:22.019 advice. I mean that's that's phenomenal advice for sales people to write. Like 328 00:21:22.099 --> 00:21:26.339 I one of my pet peeds for salespeople is they say I don't know if, 329 00:21:26.420 --> 00:21:32.890 but and then they just rattle off and they're afraid to ask that question 330 00:21:33.130 --> 00:21:34.490 because they feel like it's going to make them look stupid. Same thing. 331 00:21:34.890 --> 00:21:40.329 You know, you're trying to impress an investor or whatever that meeting is with, 332 00:21:40.769 --> 00:21:42.849 you know, a stakeholder early. You don't want to look stupid. 333 00:21:44.210 --> 00:21:48.079 Man, the smartest people I'm around, Eric, are the ones who aren't 334 00:21:48.079 --> 00:21:51.599 afraid to, quote unquote, look stupid because they ask that question. It 335 00:21:52.200 --> 00:21:55.960 shows your level of comfort in your own skin, it shows your confidence in 336 00:21:56.079 --> 00:22:00.319 yourself and it shows your curiosity to learn what you don't know and it reinforces 337 00:22:00.509 --> 00:22:03.430 Hey, I know where I'm strong and I also know where I'm weak, 338 00:22:03.509 --> 00:22:07.670 because no, no one of us is fooled. Right, investors included. 339 00:22:07.789 --> 00:22:11.190 That all, Eric Logan. They you know, they've got their act together 340 00:22:11.309 --> 00:22:15.269 on all fronts. Right, if they've been around the block or two a 341 00:22:15.670 --> 00:22:18.940 time or two, then they know that that no one does right will kill 342 00:22:18.980 --> 00:22:22.140 you every time and us out. So yeah, absolutely, yeah, just 343 00:22:22.259 --> 00:22:26.339 don't waste time there. I love what you're saying there. Speak a little 344 00:22:26.339 --> 00:22:30.049 bit, Eric, to getting the right people on the bus. You drop 345 00:22:30.170 --> 00:22:34.369 some really good advice earlier in talking about folks that are willing to wear multiple 346 00:22:34.410 --> 00:22:38.170 hats, that are good generalists, that you know embody what we call it 347 00:22:38.250 --> 00:22:41.450 sweetfish, owning the result. They don't just say, okay, this is 348 00:22:41.569 --> 00:22:45.799 my job and I take it from a Toc but they look at okay, 349 00:22:45.799 --> 00:22:48.400 if I can't get it here, I'm going to I'm going to be resourceful, 350 00:22:48.400 --> 00:22:49.640 I'm going to get you know, I'm going to get scrappy, I'm 351 00:22:49.640 --> 00:22:53.000 going to find a way to get it done. Any characteristics that you look 352 00:22:53.079 --> 00:22:56.680 for in building that team or how you think about, you know, reverse 353 00:22:56.720 --> 00:23:02.190 engineering the culture that you want? Any any final parting thoughts on the people 354 00:23:02.470 --> 00:23:06.190 that you start heart to put on the bus? Were at the rocket ship. 355 00:23:06.309 --> 00:23:07.869 Hopefully it as it were, like I like the rocket ship, but 356 00:23:07.990 --> 00:23:12.019 an Algamman it's again it depends on the business, but regardless of how big 357 00:23:12.099 --> 00:23:15.700 or small or whenever, you're going to have people around you that you're going 358 00:23:15.740 --> 00:23:18.900 to need to trust and rely on. I've always had a rule of not 359 00:23:18.980 --> 00:23:23.460 hiring friends only because it makes things awkward or could make things awkward, you 360 00:23:23.539 --> 00:23:26.140 know. So the to me, that's one way to look at it. 361 00:23:26.210 --> 00:23:32.609 I mean, more specifically, it's having somebody or a team, hundred, 362 00:23:32.650 --> 00:23:36.410 ten, whatever, on the same page with the same type of O K 363 00:23:36.609 --> 00:23:40.890 ours are or KPI's or, you know, focus on the lighthouse. Is 364 00:23:41.210 --> 00:23:42.279 First of all a really hard thing to do. So I would say, 365 00:23:42.720 --> 00:23:48.559 you know, you know, be okay and be comfortable with making people accountable, 366 00:23:48.599 --> 00:23:52.400 even in new ways that they haven't been before. You know, when 367 00:23:52.440 --> 00:23:56.430 you're starting up you don't really want employees necessarily punching the clock. You want 368 00:23:56.430 --> 00:23:59.309 them to think about the business and be excited and, you know, feel 369 00:23:59.349 --> 00:24:02.309 the grind and have fun and all the things that come with it. That 370 00:24:02.430 --> 00:24:06.109 just takes time and experience. We we would often look for people from small 371 00:24:06.190 --> 00:24:07.829 towns that, you know, maybe they worked in a bar. They understand 372 00:24:07.869 --> 00:24:12.140 customer service or restaurant or little things are queues, where they really knew what 373 00:24:12.299 --> 00:24:18.220 it meant to not only work hard but to invest their time into the output 374 00:24:18.420 --> 00:24:21.740 that they you know, that they would expect. So to me that's a 375 00:24:21.779 --> 00:24:25.650 big one. But yeah, always be willing to make decisions quickly, both 376 00:24:25.730 --> 00:24:27.890 bring people in and letting people go. You know, you never want to 377 00:24:27.930 --> 00:24:30.450 have to deal with it, but if you don't, it really can cause, 378 00:24:30.930 --> 00:24:34.769 you know, negativity in the business which is really hard to unravel and 379 00:24:34.849 --> 00:24:37.170 it does, you know, caps like the flu and it's hard to get 380 00:24:37.210 --> 00:24:41.480 rid of. So I think that you know now it's always a matter of 381 00:24:41.599 --> 00:24:45.559 having having those open conversations, whether they be difficult, as soon as you 382 00:24:45.599 --> 00:24:48.079 can and don't let people sit on things or stew on things, be open, 383 00:24:48.200 --> 00:24:52.160 communicative and, you know, have some fun. And the more open 384 00:24:52.240 --> 00:24:53.990 you are and honest, I think people really react to it. That's how, 385 00:24:55.029 --> 00:24:56.549 you know, enable people to do what they want, what they love, 386 00:24:56.630 --> 00:24:59.710 or going to show up and work hard every day and, yeah, 387 00:24:59.750 --> 00:25:03.910 have some fun. That's some really good advice that and I love the example 388 00:25:03.029 --> 00:25:07.220 there of finding folks with very specific backgrounds or ques that could tell you, 389 00:25:07.619 --> 00:25:12.059 hey, they might be successful in this sort of environment or an early stage 390 00:25:12.099 --> 00:25:15.940 company. For more on this, I mean one thing that really helped us 391 00:25:15.940 --> 00:25:19.819 as a team is radical candor by Kim Scott, kind of leaning into your 392 00:25:19.859 --> 00:25:26.130 advice there eric of be ready and willing to, you know, set up 393 00:25:26.250 --> 00:25:29.970 a regular cadence of accountability, be ready to be able to communicate that. 394 00:25:30.049 --> 00:25:33.170 That is a big part of building an early stage team. It becomes less 395 00:25:33.210 --> 00:25:37.440 about the business and more about two people in most days and in most scenarios. 396 00:25:37.720 --> 00:25:42.039 We also interviewed a guest here on the show kind of debunking some of 397 00:25:42.079 --> 00:25:48.920 the things around the the commonly touted advice to hire slow and firefast. Will 398 00:25:49.000 --> 00:25:52.430 Link to that in the show notes because I think there's a whole other conversation 399 00:25:52.589 --> 00:25:57.109 behind here around the hiring process, specifically within startups. So I'll encourage people 400 00:25:57.109 --> 00:26:02.069 to check that out. Eric. If anybody listening to this would like to 401 00:26:02.150 --> 00:26:04.539 follow up with you stay connected or learn more about what you in the team 402 00:26:04.539 --> 00:26:08.660 at Morpheo or up to these days or in the coming weeks and the growth 403 00:26:08.740 --> 00:26:11.259 ahead. What's the best way for them to reach out? Man, absolutely 404 00:26:11.299 --> 00:26:15.539 two ways. So more PHEO DOT AI and we're all in Linkedin, so 405 00:26:15.740 --> 00:26:19.130 just head over to Eric Barden, last name Barden, views and victor a 406 00:26:19.289 --> 00:26:23.009 R. Don have to chat any time. Appreciate a little awesome way to 407 00:26:23.049 --> 00:26:26.529 make it easy, Eric. This was a great conversation. Thank you so 408 00:26:26.569 --> 00:26:32.730 much, man. Thank you appreciate talking soon. Hey, everybody, logan 409 00:26:32.809 --> 00:26:36.480 with sweet fish here. If you're a regular listener of BB growth, you 410 00:26:36.599 --> 00:26:38.400 know that I'm one of the cohosts of this show, but you may not 411 00:26:38.599 --> 00:26:42.119 know that I also head up the sales team here at sweetfish. So for 412 00:26:42.240 --> 00:26:45.599 those of you in sales or sales ops, I wanted to take a second 413 00:26:45.640 --> 00:26:51.029 to share something that's made us insanely more efficient lately. Our team has been 414 00:26:51.150 --> 00:26:53.910 using lead Iq for the past few months and what used to take us four 415 00:26:55.069 --> 00:27:00.150 hours. Gathering contact data now takes us only one or seventy five percent more 416 00:27:00.190 --> 00:27:04.579 efficient. We're able to move faster without bound prospecting and organizing our campaigns is 417 00:27:04.740 --> 00:27:08.980 so much easier than before. I'd highly suggest you guys check out lead Iq 418 00:27:10.140 --> 00:27:14.940 as well. You can check them out at lead iqcom. That's Elle a 419 00:27:15.099 --> 00:27:17.130 d iqcom.